Introduction

HMRC can issue ‘follower notices’ requiring taxpayers to take ‘necessary corrective action’ (ie amend their returns / claims or drop their appeals) where:

1. •

   the return or claim is subject to an ongoing enquiry or appeal (this includes an appeal against an assessment, determination or closure notice issued by HMRC), and

2. •

   there is a final judgment (which includes a decision in the First-tier Tribunal which is not appealed) in a tax case which HMRC is of the opinion applies to the taxpayer’s situation

FA 2014, ss 204–205

The penalties for failing to take the necessary corrective action following receipt of a notice can be as much as 50% of the tax and / or national insurance contributions (NIC) at stake and will apply in addition to any other penalties due up to a maximum of 100% of the tax (higher maximum percentages apply where an offshore matter is involved). For more on offshore matters, see the Penalties for offshore matters and offshore transfers guidance note.

The taxpayer must decide whether they should:

1. •

   accept the follower